There’s a constant buzz about disruption, which kind of sounds like destruction to me. We have to realize that no one is going to destruct or even possibly disrupt banks. No one. It has not happened in my lifetime of working with technology in banks, and I don’t think it will happen in the next generation of people working with technology in banks. That will disappoint many, as emotionally there are large swathes of people who would love to destroy the banking system. But it ain’t gonna happen.
Why?
Because banks are the only regulated and licensed institutions that act as a store of value, as I blogged the other day. This does not mean that banks should be complacent, but they can relax somewhat as change in financial services happens very slowly. In fact, the biggest change in financial services were the building of the massive global universal banks in the 1990s and 2000s, which has now been reversed.
A global, universal bank is an expensive beast to build and, as the institutions who tried this have realized, are often not well received by the local citizens. Yes, a global, universal bank was a laudable aim, but it is only needed for global, commercial clients. A consumer bank is often better off being a national institution, rather than a global one.
This is why we have seen the largest banks downsizing and reversing tracks. But what of a global platform bank? Could there be a global financial platform?
Certainly, that’s what the big internet giants have been building for commerce and socializing, so how come there’s no big global financial platform? You may say what about PayPal or Alipay, but neither of these offer global banking services, just payments. We may look at the likes of N26, Klarna, Zopa, and others, all of whom have or are trying to get banking licenses. What if they all collaborated and agreed to work in a collegiate as a global financial platform?
Well, that may happen, but even if it did, would it threaten the banks? If Amazon acquired Capital One, would that threaten JPMorgan Chase? If Ant Financial offered MyBank outside China, would that worry HSBC?
